Expiring ACA COVID-Era Subsidies to Raise Premiums and Reduce Coverage in 2026

The expiration of enhanced COVID-era tax credits is poised to significantly increase health insurance costs for millions of Americans who rely on Affordable Care Act (ACA) coverage. These subsidies have helped keep premiums affordable over the past four years, but with less than three weeks before they expire, many enrollees face financial challenges and potential reductions in coverage quality. In Wisconsin, a retired military veteran and his wife, who previously paid just $2 monthly for a gold-tier ACA plan with a deductible under $4,000, will see their premiums surge to $1,600 per month next year. They are forced to downgrade to a bronze plan with a $15,000 deductible, raising concerns about potentially catastrophic out-of-pocket expenses that could jeopardize their financial stability. Similarly, in Michigan, a self-employed family of four with an annual income of $75,000 will experience their $500 monthly premiums increasing by at least 40%. The rising costs and higher deductibles are pushing this family to consider forgoing insurance entirely and paying out-of-pocket for medical needs, despite the associated financial risks. In Nevada, a single mother is facing a nearly nine-fold increase in her monthly premium, from $85 to $750. While she plans to cover the elevated cost initially, she may be forced to drop coverage for herself if Congress does not extend the subsidies, maintaining insurance only for her young child. Legislative efforts to extend these enhanced subsidies have stalled, with the Senate rejecting recent proposals and the House Republicans' emerging health package not including extensions. This legislative deadlock solidifies expectations of substantially higher insurance costs beginning in 2026. The termination of these subsidies raises market-wide implications, including increased uninsured rates, greater financial strain on middle-income families, and adjustments across insurers in response to shifting risk pools. Healthcare providers and payers may also face changes in demand and patient coverage levels, influencing the broader health insurance landscape and regulatory compliance requirements. Stakeholders in the insurance industry should monitor legislative developments and prepare for operational impacts related to premium pricing, customer retention, and policy design as ACA enrollees adjust to the post-subsidy environment.